What is the standard deviation of return

Assignment Help Finance Basics
Reference no: EM133069856

Choudhary Corp believes the following probability distribution exists for its stock. 

                                                          Probability                       Stock's

            State of                                of State                              Market

            the Economy                      Occurring                           Return

            Boom                                        0.45                                     25%

            Normal                                     0.50                                    15%

            Recession                                 0.05                                     5%

1. What is the expected rate of return on the company's stock?

2. What is the standard deviation of return?

3. What is the coefficient of variation on the company's stock?

Reference no: EM133069856

Questions Cloud

What is the cost of goods sold : Purchases for resale during the year were $20,000. Inventory on December 31 is $5,000. What's the cost of goods sold
What is the current stock price : If the stock's required return is 12.51%, and its return on equity (ROE) is 19.00%, then what is the current stock price?
What is the value of currency swap : Green Shoes Cobbs Inc. receives annual GBP payments of 6% on a notional of GBP 15,000 Green Shoes Cobbs Inc. pays annual USD payments of 7% on a notional of USD
Computing basic earnings per share for year ended december : What is the number of shares that should be used in computing basic earnings per share for the year ended December 31, 2016
What is the standard deviation of return : Choudhary Corp believes the following probability distribution exists for its stock.
Demonstrate evidence of your own critical thinking : Demonstrate evidence of your own critical thinking and argumentation; this means showing how you move from the textual evidence to your own assertions
What is the estimated inventory on july : On July 8, a fire destroyed the entire merchandise inventory on hand of Larrenaga Wholesale Corporation. What is the estimated inventory on July
Estimate the expected return for investors : There is a probability of 0.42 that there will be extremely cold weather this coming Winter. If it does, we expect investors of Star & Bucks to achieve a return
Search engine versus metasearch engine : Which search engine do you prefer? Why? What are the advantages and disadvantages of using a search engine versus a metasearch engine?

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the required rate of return

A. Draw a timeline of an investment that is worth $5000 today and grows to $10,000 in 5 years. B. Calculate the required rate of return on this investment

  Buy the premium mustang convertible

1. If Suzie chooses 3.1 percent APR financing for 48 months to buy the premium Mustang convertible, which costs $22,000 = PMT (45.088608) what will be her monthly payment?

  What is annualized holding period return

During this period the stock paid dividends of $4.07 per share. What is your annualized holding period return (annual percentage rate)?

  What does the mean for the future of entrepreneurship

How have the costs of entrepreneurship changes in the past decade? Why? What forces are behind these changes? What does this mean for the future.

  What is the companys net cash flow

ABC corporation has operating income of $44,569. The company's depreciation expense is $9,918. The company is all equity-financed and it faces a tax rate of 30%. What is the company's net cash flow?

  What is the aftertax salvage value of the asset

An asset used in a 4-year project falls in the 5-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $16,554,000 and will be sold for $3,738,000 at the end of the project.

  Analyze a number of additional factors related to the home

Analyze a number of additional factors related to the home

  Determine the depreciation and book value for the hogs

Davis Farms purchased breeding hogs at a cost of $80,000 this year. Assume that the breeding life of these hogs is 4 years.

  What group has the ultimate responsibility for protecting

In a corporation, what group has the ultimate responsibility for protecting and managing the stockholders' interest.

  Problem on the second exam company

The Let's Do Great On The Second Exam Company expects a constant growth in earnings and dividends of 4.5%/year into the foreseeable future.

  What is the net present value of the project

What is the net present value (NPV) of the project if the company's cost of capital is 13.15 percent?

  How diversification benefits the investor

Assess how diversification benefits the investor. Can you imagine circumstances where an investor would not want to diversify? Discuss why or why not.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd